There is a perceptible shift away from cash, the RBI study notes “Cash is king, but digital is divine”, said a Reserve Bank of India study, underscoring that although cash is deeply embedded in the payment systems in India, planned efforts post-demonetisation have shown a marked shift from cash to digital payments.
Both cash and non-cash payment instruments fulfil unique needs, and as long as these needs do not change, both types of payment instruments are required to meet the full spectrum of user’s needs, the study said.
Pointing out that cash in circulation (CIC) as a percentage of GDP dipped to 8.70 per cent in 2016-17 due to demonetisation and an active growth in GDP, the study said this increased to 10.70 per cent in 2017-18 and to 11.2 per cent in 2018-19. This, however, was less than the pre-demonetisation level of 12.10 per cent in 2015-16. It emphasised that the rate of increase of CIC as a percentage of GDP is lower, indicating a perceptible shift away from cash.